A proposal by the federal Labor Party to set a minimum farm gate milk price is recognition that change is needed to get dairy farmers back on their feet, says Dubbo's Erika Chesworth.
The NSW Farmers' dairy committee chairwoman isn't yet sold on the proposal but at the same time she is certain that change of some kind is required for the industry to survive.
“Dairy farmers in NSW need change for the long-term sustainability of the industry," Ms Chesworth said.
"Milk production has plummeted 11 per cent over the last 12 months."
This week Ms Chesworth and federal Agriculture Minister David Littleproud panned Coles and Aldi for not following Woolworths in ceasing the sale of $1-a-litre milk.
Labor agriculture spokesman Joel Fitzgibbon then proposed the floor price to end an eight-year price war which has brought dairy farmers to their knees.
Ms Chesworth said dairy farmers were operating in an "environment of market failure and competition issues".
"The NSW dairy industry is in difficult times, with sustained increasing input costs and flat farm gate returns making farmers' businesses unprofitable," she said.
“Farmers are operating in supply chains that are unfair and we need to get a level of fairness back into the system.”
Ms Chesworth said NSW Farmers would engage with policymakers and members of the industry to understand the likely implications of the proposed floor price for Australia's domestic and export markets.
“As NSW is largely a fresh milk state, we want to understand the potential impacts to ensure that the value of our product is recognised," she said.
The Labor Party is promising to look into a floor price for milk if it wins government later this year.